Revealed: The most cost-effective way to heat your home

 Family in winter
It doesn't have to cost a fortune to stay warm this winter. Photo credit: Getty

The accidental inhalation of fumes from an unflued portable gas heater which caused the death of an elderly man in Christchurch highlights the importance of safety in home heating. Many people turn to gas heaters as a matter of cost, but there may be cheaper ways to heat your home. 

Research confirms that heat pumps are the most cost-efficient solution and that electricity is the fuel of choice to heat New Zealand homes. 

The graph below compares heater running costs based on per unit of heat delivered (actual running costs may differ and depend on room size, heater model, outside temperature and the chosen thermostat setting).  

EECA - home heating cost by type
Home heating costs by type. Photo credit: EECA

Cited as the most cost-effective option overall, heat pumps provide maximum power output and use less electricity than other options. They provide instant heat and are easy-to-use. 

Darren Munden, experienced specialist of home heating products sold via Placemakers and Mico, said although more expensive initially, a heat pump is the most affordable option for the majority of circumstances over buying a cheap electric heater.  

"You're making that money back in the long-term, because you're using around three times less electricity," he explained.  

Munden also confirmed that well over 50 percent of home heating products sold in New Zealand are heat pumps.

"They are an affordable solution that works," he said. 

If you plan to be in your home for five or more years, a heat pump can provide long-term savings over electric heaters and other portable forms of heating and savings on electricity can be made to help off-set the cost. 

How are Kiwis heating their homes?

Statistics New Zealand data indicates that the majority of New Zealand homes continue to use electricity to heat their homes (75 percent), followed by wood (35 percent), bottled gas (15 percent) and mains gas (11 percent), noting that homes may use more than one source. 

Home heating doesn't come cheap: the average weekly expenditure on electricity is $37.70 and heat pumps incur an upfront cost. So where can savings be made?

Good insulation will help to protect against heat loss and increase the efficiency of any heating appliance used.

The Energy Efficiency and Conservation Authority (EECA) covers two-thirds of the cost of ceiling and underfloor insulation in most areas and includes a heater grant of up to $2,500 for low-income owners of homes built prior to 2008.

Christian Hoerning, EECA technical expert said that some councils allow people to add the cost of insulation (and in some cases, heaters) to their rates and pay back the cost over a number of years.

What are the options?

When evaluating home heating options, the considerations are:

  • Room size and function.
  • Time period requirements (e.g. thermostat-control or short-term heating). 
  • Number of people (e.g. one person, one room or family living room). 
  • Upfront cost (budget restrictions).
  • Safety (e.g. young children, exposure to gas or flame, hot surfaces, ventilation).

Fuel-based home heating options can be broadly categorised as electric heaters, heat pumps, wood burners and LPG gas heaters. 

Heating with electricity

Electric heaters use electricity to run and include portable and fixed options. Examples are panel heaters (low heat output, can be useful for bedrooms), oil heaters (heat mostly air rather than surfaces), bar element radiant heaters and fan heaters.  

Electric heaters generally provide targeted heat with low upfront costs and are portable and easy-to-use. For families, safety concerns, such as exposure to heat and tipping can be red flags, as is the lack of a thermostat to control heat level and power use.

Fan heaters carry a noise factor, making them more suitable for short-term heat (e.g. bathroom). 

Heat pumps can be mounted to the wall, floor, ceiling or ducted throughout the house.   Although also using electricity, heat pumps work differently to standard electric heaters, moving hot air around, using an 'evaporator coil' to extract warmth from the air outside and transferring it to the inside, generating a lower energy output. 

Being dual purpose (heating and cooling), heat pumps are a popular option, however, the upfront cost is higher compared with electric heaters (from $2,000 including installation for a 5.4Kw wall-mounted system to heat a living space of 30-40sqm). 

In weighing up cost-efficiency of different units, look for the star rating on the Energy Rating label (explaining how much electricity the unit will use) and compare current deals.

Heating with wood or gas

Heating options that don't require electricity include wood burners, wood pellet burners and gas heaters (natural or LPG gas bottle). 

Wood and wood pellet burners incur the highest upfront cost and require floor space.  Research indicates the cost for a 16kw wood burner (to heat around 160 sqm) to be anywhere from $1,800 for the unit, plus installation from $1,500 (includes tiled flooring and chimney) and a council permit (cost differs per local Council, around $450 for Auckland). Wood pellet burners start from around $5,000 for the unit and pellet bags cost around $10 (average house-hold use is around three bags per week during winter).  New regulations require them to be clean air emissions burners. 

The choice of a standard wood or wood pellet burner will largely depend on whether there's access to wood and the space to store it.  Pellet burners are generally more expensive and are easy to use, without requiring the labour of chopping wood and lighting a fire. 

LPG gas heaters (natural or LPG) can provide options for portability and back-up heating. While a cheaper alternative to LPG gas, natural gas may not be available in all areas and bottled gas can be up to two-thirds more expensive. 

The health risks associated with portable gas heaters require that the room is ventilated and they are not recommended for bedrooms due to safety and fire risk.

Save money on your electricity bill

Electricity usage typically spikes over the winter period. Use the following tips to reduce your bill:

  • Only heat while at home (e.g. use a thermostat or timer and turn it off when going out).
  • Set the thermostat to a healthy temperature: 18-21 degrees is recommended.
  • Close curtains and doors to help insulate heat.
  • Turn off appliances (including portable heaters) at the wall.
  • Dry clothes outside (or use a portable clothing rack under cover).
  • Tighten hinges, catches and latches to stop heat loss.
  • Ventilate rooms (open windows regularly to reduce damp and mould).
  • For heat-pumps, choose auto fan setting (the fan will deliver more or less power and switch off when the thermostat reaches the set temperature).
  • Ensure your home is adequately insulated to help retain heat.

Information on improving energy efficiency is available on the EECA website.  

To check if you're eligible for a home insulation and/or heating grant, go to the Warmer Kiwi Homes website